New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1887-01-04

THE CENTRAL TRUST COMPANYS MORTGAGE IN
vALID-vALID LIENS HELD BY THE UNION
TRUST COMPANY AND BY soETHER AND
M'GoURKEY.
IBY TELEGRAPH TO THE TRIBrNK.1
CLEVELAND, Jan 3.-Thc suit Of the Union Tpust Com
pany against Tie New York Chicago and St Louis Rail
road decided oday in the Common Pleas Court by
Judges Jones and Hamilton The Union Trust Company,
representing the second mortgage Of S10.0OOOOO asked
for foreclosure and SALE The Central Trust Company
filed petition, stating that 1t held first mortgage
OF $5OQ0OOO and asking that its claim be considered
and adjudged prior lien Shethcr and McGourkcy. rep
rcscnting the holders OF the trusts presented claim
of $4,0O0,00O for equipments furnished Inc
Union Trust Company disputed this claim ana
with several Judgment creditors including the Lake Shore
and Michigan Southern Railroad Company attacked the
validity of the mortgage for $l5O0oo00. They claimed
that il was invalid because the company never became
consolidated corporation and that II was Substantially
without consideration, given to secure fraudulent issues
of bonds To its directors syndicate acting together
for fraudulent purposes The judges held tat the CON
soldation OF the vc companies into the NewYork Chi
cago and ST Louis Railroad was not III accordance with
section $50 OF the Revised statutes ~ Ohio and that the
transfer of S5OO0OOOO Of the capital stock OF
the road, paid M stock ana Sl',ooo,o"o
bonds for $1s,O0000O advanced. secured by the
first mortgage to the Central Trust Company ny
the directors of the railroad themselves and other
members of the syndicate was fraudulent ltle are
numerous other things the decision states showing nat
Of railr"ad' II was therefore held that the alleged
mortgage for $15.OOO,O00 claimed ny the Ccht trust
Company is null and void and that no lien on the prop
I'VE do not think II necessary" said the judge. "tc
President Vanderbilt the stock Exchange In 1883 and
the rectals in the second mortgage might have IN
its mortgage. for we hold that the doctrine of
estoppe cannot be utilized in this casc; for no matter
how often the transaction may be ratified, II II Illegal
still We find therefore that the mortgage Tor
$lOOoo,ooo, held by the Union Trust C"mrany 81 Is = a
.pIa N
fault. alleged the Union Trust COMPANY is emitted 10
orcose on the railroad for ,n s %cn e anrssa re
sement and sale of the entire railroad with all lts prop
crty and appurtcnances hy one or more master commits
sioners to be hereafter appointed VIII" are hereby
directed by bring the money INTO court 10 ,, DO
rns hrned an% TO 'ss fr 0saSS an" the %
creditors Of the road An order VII II, AZ" "o" %e
Erie Cleveland Fort Wayne and Cnicago, directing all
The claim of shethcr McGourkey the trustees OF the
car trusts 81 100000 for equipments FURNISHED was
held To be valid and not covered hy either OF ,,c ~ '1 ,r
CAGES, and decree was ma for the separate sale OF 'he
| equipments.
The decision received in Wall street with something
| like ncreduy, hut neither the bondhodcrs' committee
nor their counsel had any special Information about H.
on the part of the committee It said that an appeal
would taken Immediately and AT the office OF Butler
Stillman Hubbard il said that trial would he
had before the United States Circuit Court Mr. Sulimhn
after reading the press dispatch III the afternoon news
see that the court adjudres $4,000 600 of the bonds
to uc licgal ana Noh tlc piSls oi -
PLAIN The is county affair aud judge Jones re
res the bench next month, believe. The Wander
the suit in the County Court and We HAD 10
meet them there All ! can say no" Is That apparently
We have been licked have telcgIaihcd Ia Cleveland 10
arrange for trial in the Circuit Court where We IN
/ tended originally to Try the ease
In reply To question whether there was either law or
equity in the decision. Mr. Stiliman replied there -
any law il il not clearly visible and II there IS any
equity is Of the kind that takes the coat from my back
and puts without any compensation. The de
csion is simply ridiculous and there Is no doubt that II
Will be set aside appeal"
The rc, OF Nickel Plate" fret mort gage bonds and
of the common and preferred sorks declined somewhat
after the the decision made public but The
decline slight in comparison with what II probably
would hav, been II II had not hetn the opinion OF many
SPECTATORS that the decision would not be sustained